In another transaction to help develop and strengthen the local currency bond markets in the Asean region, the Credit Guarantee and Investment Facility (CGIF), a trust fund established by the Asian Development (ADB), has guaranteed the issuance of a 700 million baht (US$22.78 million) bond by JWD InfoLogistics of Thailand. This is JWD’s first offering under its 1.9 billion baht guaranteed bond programme, allowing the company to fund the expansion of its logistics infrastructure.

The five-year bond deal, announced on March 5, is priced at 2.10%, which CGIF chief executive officer Guiying Sun says reflects CGIF’s strong market acceptance. “This translates to cost savings for JWD and promotes efficient capital market investment into one of the region’s most strategic sectors,” she adds. “JWD is in a sector that is vital to both Thailand and Asean, and has shown resilience amid the pandemic conditions.”

Integrated logistics and connectivity are key priorities for Thailand, a supply chain hub for inter-Asean trade. CGIF’s guarantee will facilitate JWD’s long-term investments into their logistics, warehouse and cold storage businesses – strengthening JWD’s integration across the value chain. This transaction further underpins CGIF’s continuing role as a catalyzer of Asean infrastructure financing and local currency bonds.

According to Adisorn Singhsacha, founder and CEO of Twin Pine Group Company, which acted as the adviser to JWD, this is the first time ever that CGIF has guaranteed a medium-term note programme, providing JWD the flexibility to raise funds in line with its investment needs. "This transaction has demonstrated CGIF’s confidence and belief in the growing success of JWD’s businesses, while receiving very positive feedback from the investors,” he points out.

JWD chairman of the executive committee and CEO Charvanin Bunditkitsada says that with the guaranteed bond programme, JWD will be able to expand its logistics infrastructure in a timely manner during Thailand’s economic recovery. In addition, it will also have the opportunity to learn and adopt a world-class environmental and social management system (ESMS), which will enable the company to have sustainable business growth.

The financing will be a crucial step for JWD’s business expansion, according to Anuwat Ruamsuke, head of capital markets at Kiatnakin Phatra Securities, which acted as a joint lead arranger for the transaction, along with Kasikornbank. “It not only provides the funding the company needs, but the guarantee from CGIF also opens up an opportunity for JWD to issue longer bonds and to meet with new investor groups, which will undoubtedly be beneficial to the company in the long run,” he says.

Adds Ronnarit Virachanang, head of debt capital market at Kasikornbank: “This issuance brought a number of institutional investors, including asset management company, commercial bank and life insurance company, into the transaction, which demonstrates the positive development of the local bond market.”

JWD commenced operation in 1979 as a provider of specialized logistics solutions, including home and office moving, property development and document storage services, before turning into a provider of total logistics and supply chain solutions, including cargo warehousing, storage, transport and distribution, and logistics software development, and offering expertise throughout the Asean region. The group has more than 40 subsidiaries and has operation bases and network in nine countries.

CGIF commenced its guarantee operations on May 1 2012 and seeks to provide credit enhancements, mainly in local currencies, issued by credit-worthy Asean+3-domiciled bond issuers.